World Economy

Bundesbank Warns of Grexit

Bundesbank Warns of GrexitBundesbank Warns of Grexit

Bundesbank chief Jens Weidmann warned Angela Merkel’s cabinet that a Greek exit from the eurozone would rip billions of euros out of the German budget, German business daily Handelsblatt reported on Sunday, citing government sources. The paper said that Weidmann had warned that the costs of a Grexit would hit Bundesbank profits, which flow into the budget, Reuters reported. It added that Bundesbank losses would be greater than the $16 billion (€14.4 billion) already put aside in provisions linked to the eurozone debt crisis because it would make losses on Greek securities bought by the central bank. “This would not be enough in the case of a Grexit,” Handelsblatt reported without specifying its source. A Bundesbank spokesman declined to comment, as did a spokesman for the German government and for the finance ministry.